Blockchain,
bitcoins and rental payments

The financial press, stock market and Silicon Valley entrepreneurs all see the blockchain as a massive business disruptor, and Bitcoin as potentially a new global currency, says CoreLogic’s Greg Dickason.

“Once Bitcoin was mostly associated with the illegal Silk Road darknet market, but now the excitement is about the blockchain technology that Bitcoin uses,” Dickason (pictured), CoreLogic’s chief technology officer says.

A blockchain is a distributed database that maintains an ever-growing list of records, or ‘blocks’, that are secured from tampering and revision. The first blockchain was developed in 2008 as a core component of the digital currency Bitcoin, as it serves as the public ledger for all transactions.

Blockchain technology enables people to transact without any need to know or trust each other. It also allows for money to be ‘programmed’ through ‘smart contracts’, and for accounts to be reconciled almost instantly,” Dickason explains.

The real estate industry is already seeing emerging applications using the blockchain. Managing payments or transferring assets between people who don’t know each other, and without needing a bank or other trusted authority in the middle, are just two examples.

Dickason points to Midasium, dubbed the ‘blockchain of real estate’ as an interesting example.

“A recent finalist in the CitiBank challenge, Midasium’s Smart Tenancy product allows automatic payments to landlords, contractors, councils, and property managers, using rent or bonds as a source and with smart contracts enabling transparent disbursement of funds and automatic reconciliation to a bank,” he says.

“The smart contracts are a digital version of the traditional tenancy contract, and even control escrow for the bond payment to reduce or eliminate bond fraud. Midasium monitors when payments should occur and can take actions if no payments arrive or if payments are incorrect.”

This may sound a little far-fetched compared to the software that most property managers are familiar with, but this is the same technology that the Australian Stock Exchange is investigating for settling share sales, and that the Commonwealth Bank, JP Morgan and other global banks are prototyping for foreign exchange and other financial settlements.

CoreLogic has an active blockchain research team looking at the financial risk management, and property impacts the technology will have on its business, customers and partners.

“Like any technology there are opportunities and threats, but we think blockchain can be a huge positive for technology-savvy business owners as it makes back-end processes so much more efficient,” Dickason concludes.

CoreLogic is the largest provider of property information, analytics and property-related risk management services in Australia and New Zealand. Find out more online.